U.S. should raise minimum wage on a regular basis

Sunday

Sep 8, 2013 at 12:01 AM

Workers getting paid a minimum wage of $15 an hour in the United States isn't happening! At least any time soon.

But the protest held by fast-food workers in 50 cities a couple weeks ago, did bring a problem to light in America. This nation, sporting the world's largest economy, is not paying entry-level employees enough money. If you work full-time, you could be considered a member of the federal poverty contingent.

If a person works 40 hours a week at the current federal minimum wage of $7.25, they are taking home $15,080 per year. A single person is considered at the poverty level if they make $11,490 or less, and a family of four is living in poverty if their annual income is at $23,550 or less. So, it is obvious that minimum wage isn't doing much to help people keep their heads above water. That should be very evident when you can spend one hour of pay in order to purchase a combo meal at any fast-food restaurant.

According to 2012 statistics, of the 75.3 million Americans working for an hourly wage, 1.6 million make minimum wage and 2 million actually make below the federal minimum wage.

What America's problem is it doesn't increase the minimum wage according to inflation and the cost of living day to day. No, raising the minimum wage only occurs, it seems, when the outcry from the labor force is strong enough to make the business lobby budge.

Congress and business didn't budge for a whole decade when the rate stayed at $5.15 from 1998 to 2007. It went to $5.85 in 2008, $6.55 in 2009, and has remained at $7.25 from 2010 to 2013.

What America needs is a more systematic method of raising the federal minimum wage without it becoming a big fight on the floors of Congress, or in other words a stalemate where nothing happens.

One way to look at it is to approach it like a collective bargaining agreement. If the contract is for 10 years, the minimum wage is raised each year, or every other year, according to the percent increase in the cost of living expenses. Thus, a beginning worker's pay keeps pace with the increase they experience in their rent, groceries and other expenditures.

Getting the minimum wage up to $9 an hour could be a good starting point.

Jumping up to $15 an hour could be detrimental to an economy that hasn't totally recovered from the Great Recession. Our nation's unemployment rate is still high at 7.4 percent, which is well above the normal 5 percent the U.S. has been used to in the past.

Looking at a minimum wage boost from the business owner's perspective means making some adjustments. When manpower is typically the largest fixed expense of a business, owners eye remedies when such added expense is thrust upon them.

If the minimum wage were to leap to $15 an hour, one move would surely happen. Fast-food restaurant owners would find a way to streamline their businesses, meaning finding a way to operate with fewer people. They may find a way to automate certain tasks and thus eliminate a few jobs, and thus boost the nation's unemployment rate.

Many mom-and-pop retail shops depend on, I won't say cheap labor, but inexpensive labor in order for their enterprises to survive.

So an increase in the minimum wage needs to occur gradually, but not once every 10 years. If businesses know they could face an increase in labor costs on an annual basis, they can adjust and find ways to save money rather than automatically raising the price of their products.

A raise in the minimum wage doesn't have to mean the increase will get passed onto the consumer.

The positives of steady minimum wage increases should mean fewer Americans living below the poverty level and more money to feed our economy.

So, Congress not only should act on President Barack Obama's proposed increase to $9 an hour by 2015, but should figure out the increases for the next 10 years. The Japanese make a habit of long-range planning, and the U.S. should follow suit when it comes to paying our hourly wage earners.

The wealthiest nation in the world should not have people living in poverty because they are working full time.

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In related news, collective bargaining negotiations are going on at two entities in southeast Iowa.

American Ordnance is in the middle of talks with its 13 unions at the Iowa Army Ammunition Plant in Middletown.

Federal Mogul's Burlington plant also is trying to work out a new contract with UAW 1237. The union's four-year contract expired Aug. 31, but a two-week extension has been granted while talks continue in Indianapolis.

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